Holidays Can Be Stressful, but Your Holiday Policy Shouldn’t Be

The winter holidays mean time off from work to celebrate with family and friends. But for many people, the holidays are filled with tension. Although the holidays themselves can be exhausting and stressful, your holiday policy should provide a sense of clarity and relief—not anxiety.

Which Holidays to Observe?

Under federal law, and for Kansas, Missouri, Oklahoma and Arkansas, employers are not required to give their employees holidays off. Though there are a few states that mandate employers to observe certain holidays, being a Scrooge about holidays is no way to foster employee morale and good will.

Most employers observe at least six holidays: New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving, and Christmas. Government employers and some private employers also observe Martin Luther King, Jr.’s birthday, President’s Day, Juneteenth, Columbus Day, and Veterans Day. Other commonly recognized holidays include the day after Thanksgiving, Christmas Eve Day, and New Year’s Eve day. New to the list of federally recognized holidays is Juneteenth, celebrated on June 19 to commemorate the end of slavery.

If a holiday falls on a Saturday or Sunday, most employers allow employees to observe weekend holidays on either the preceding Friday or following Monday. Of course, the federal government and most states have standardized their observance of certain holidays to a specified Monday, which many private employers also choose to follow.

Many employers offer one or more “floating” holidays. Some employers assign the floating holiday to a Monday or Friday to allow for a 4-day weekend if the holiday falls on a Tuesday or Thursday. Other employers allow employees to use the floating holiday to take time off at their discretion. Using the floating holiday for this purpose allows for religious observances not covered by the regular holiday schedule. This practice helps employers satisfy their duty to reasonably accommodate employees’ religious observances and practices, as required by federal law. Although the standard for accommodating employees’ religious beliefs is modest, it is a good idea to go beyond the legal minimum. Giving employees an extra holiday or two, which they can use to attend religious observances such as Ramadan, Yom Kippur, or Good Friday, is cheaper than defending a lawsuit. More importantly, it is good business practice to promote ethnic and cultural diversity and to foster tolerance and inclusion among your workforce.

To Pay or Not to Pay?

As a general rule, employers are not required to pay employees for holidays if they are not working. But many companies provide a number of paid holidays as a fringe benefit to attract and retain workers. Your Holiday Policy should define how paid holiday hours are allocated and address the different considerations for exempt and non-exempt employees.

Failing to pay exempt employees for holidays off puts their exempt status at risk. Employees must be paid on a “salary basis” to qualify for the Fair Labor Standards Act’s executive, professional, or administrative exemptions to overtime pay. This means the employee must be paid a predetermined salary for each work week, regardless of the hours actually worked that week. If the company makes deductions from an employee’s salary “for absences occasioned by the employer or by the operating requirements of the business,” the Department of Labor does not consider the employee to be paid on a “salary basis,” and thus cannot be exempt.

For non-exempt employees, the Fair Labor Standards Act does not require overtime or additional pay for hours worked on a holiday, though many employers may choose to provide extra compensation for holiday work. As an additional note, if non-exempt employees are granted a paid holiday, holiday pay is not counted as hours worked when calculating overtime.

Plan Ahead

The key to managing holiday policy stress, as well as the holidays themselves, is to plan ahead. Take a look at your holiday policy. Is it clear? Does it address the issues raised in this article? If not, some revisions might be in order. As for 2023, Independence Day falls on a Tuesday. Will you allow your employees to take a floating holiday on Monday? Have your lawyer review your policy to make sure it fully complies with all applicable laws.

Happy holiday policies!

Morgan E. Geffre
Morgan E. Geffre

Foulston Employment Law Attorney